West Virginia Fixed Index Annuities

 These days, people are worried about their retirement savings.  Most have a 401 (k), an IRA, and if they are very lucky, a pension plan.  We have talked to many people who have lost a large amount of retirement savings in vehicles that are tied to the stock market, and for a long time, there have not been many places that a person could put money that could guarantee a decent return without substantial risk involved.  CD's (certificates of deposit), money market accounts, and other "safe" vehicles do provide safety, but offer little to no return on investment.  They barely keep up with inflation, and many times lose money when funds are taken in retirement.  

In the past decade, the insurance industry has developed a hybrid solution that combines the safety of guarantees along with the prospect of participating in some of the market gain.  This is called a "Fixed Index Annuity", or "Eqiuity Index Annuity".  These are products issued by an insurance company, and are much like traditional annuities that pay a fixed rate of return.  These annuities follow an index such as the S&P 500 or NASDAQ 100.  They credit gains up to what is called a "cap", but offer downside protection. This means that in a negative or down year, an annuitant willl receive a 0% gain/loss.  In a positive year, the annuitant will receive a portion of the gain; typically 6-10%, depending on the product/insurer.  This is a way to hedge inflation, have no downside, and have the opportunity to participate in the market without the risk of other vehicles.  

Many of these annuities guarantee a fixed rate of return, so you are always assured of a positive return.

Tax Deferral - An annuity gains value on a tax deferred basis.  Therefore, your money grows faster because you earn interest on dollars that would normally be paid as taxes. Your principal earns interest; this interest compounds allowing you to make more money over a shorter period of time, thereby earning a greater return on your money.